The 21st International Hotel Investment Forum (IHIF) took place from March 5th to 7th 2018 at the InterContinental Berlin, with 2’300 participants (another record) from over 80 countries.
Here are top 5 Highlights:
1. Carlson Rezidor Hotel Group announced its rebranding to Radisson Hotel Group (RHG). This change, revealed at the Forum, “Every Moment Matters” is the new signature service philosophy of the company and al its hotel brands. RHG currently is made up of 8 hotel brands and is the 11tzh largest group worldwide with more than 1’400 hotels in operations and under development. To celebrate this rebranding, the opening day’s evening reception was hosted by the Radisson Blu Berlin.
2. Keith Barr, CEO of IHG, confirming that the company is getting closer to announcing a deal for another luxury hotel brand. Rumors were and still are that IHG is looking at buying Belmond however, Mr. Barr indicated that was not the case. The new luxury brand should add value to the overall portfolio of brands and a high-end luxury brand by IHG is what owners and investors are asking for, said Mr. Barr. This new brand should have “history and heritage”; could it include Kempinski, Shangri-La or maybe Mandarin Oriental? According to Mr. Barr, the announcement on the brand identity is soon to come.
3. Continuous discussions in various workshops and plenary sessions on some “icebergs” such as Brexit and Airbnb. The effect of both in most cases is believed to be underestimated. More than before, discussion were on staff productivity; do hotels measure the productivity of their staff in the different departments in order to optimize efficiency? Are there (IT) systems in place to measure this performance? Knowing that on the P&L the payroll is our most important cost, productivity of staff should be measured and targets to be set.
4. The overall industry picture is positive because global travel continues to increase. According to the UNWTO, international tourist arrivals grew by 7% in 2017 to 1.3 billion. In 2018, that number is expected to grow by as much as 5%. The industry is still showing healthy signs of high occupancies and strong construction pipeline numbers, though changes such as higher interest rates and increased operating costs in the near future may bring the good times to a halt.
5. Several investors agreed that hotels as an investment asset are becoming mainstream compared to a few years ago when hotels were considered purely as an alternative asset class. When hotel assets are available to buy, there is a gap seen between the valuation expectations of buyers and the sellers. The high riding market, flush with relatively cheap cash isn’t helping bringing down valuations either nor is the ability of hotels to deliver premium returns over bonds. The Brexit referendum has caused European and American investors to be wary of European assets while Asian buyers are taking advantage of this. However, Chinese government recently imposed restrictions on overseas investments in the hospitality sector. The effects of it may mean divestments, leading to more hotels coming on the market.